The federal government has decided to issue Terms Finance Certificates (TFCs) worth Rs137 billion in, what the analysts believe, another attempt to ease liquidity problems of the energy sector. However, the industry grapevine is suggesting that the transaction is likely to be exhausted within couple of days. The transaction would clean the balance sheet and reduce short-term borrowing of the energy sector companies by Rs109 billion, while another Rs28 billion would be fresh injection in the system. For the banks, it would slightly reduce the non-performing loans in short-term and may lead to one time positive impact on earnings. Overall, the transaction aims to revitalise the lending capability of the banking sector to the energy chain.
